QRU receive cash bailout from ARU

[TOCC]

THE near-broke Queensland Rugby Union has been granted a cash bailout from the Australian Rugby Union to head off the dire possibility of being placed in administration.

While it heads off the prospect of outside administrators being called in to manage the QRU's cash-flow crisis, that "Big Brother" input will come from the ARU and strict protocols on the way forward financially.

Queensland rugby's governing body will declare another multi-million dollar loss when financial statements are tabled at next month's annual general meeting.

A serious cash flow problem, exacerbated by poor crowds and revenues at Suncorp Stadium, has put the QRU in desperation mode and in need of assistance.

Approximately $1 million is written off each year in depreciation on their Ballymore home which the QRU has repeatedly said is "not sustainable".

A source today indicated that the ARU and QRU were on the verge of announcing a "financial arrangement" to ease the cash crisis.

The QRU's financial dilemma became even more muddied last year when a Crime and Misconduct Commission inquiry investigated whether money from a $4.2 million State Government grant to help formative redevelopment plans at Ballymore was siphoned off to meet the QRU's day-to-day expenses.

Two weeks ago, new QRU chief executive Jim Carmichael branded as "poppycock" the suggestion that a Sydney meeting with the ARU was aimed at a bailout to ease the state body's financial burdens.

It now seems such an assistance package is essential. The national rugby body bailed out the cash-stricken NSW Rugby Union in the early days of professional rugby to get it back on its feet.

Administrative direction, upgraded financial practices and a guiding hand to the future were all part of the ARU's involvement with the NSWRU.

There is no risk of player payments not being met for the Reds, who face the Chiefs in a Super 14 match in Hamilton tomorrow afternoon.

A wages bill of $4.3 million annually is met by the ARU while top-up contract amounts for Wallaby stars like Digby Ioane and James Horwill are met out of ARU coffers.

An ARU spokesman said yesterday: "We deal with the QRU on a number of
fronts. We cannot discuss business related material."

http://www.couriermail.com.au/news/...lian-rugby-union/story-e6freon6-1225837040606

 

[TheRiddler]

So perhaps a certain fly-half was just trying to help the clubs finances a couple of months back by acquiring some computers for the office at a bargain rate. Allegedly.

 

[chief]

I know the Ballymore match wasn't really a success, but surely next year they should contemplate the move to Ballymore. Urge the Federal Government and State Government to give them enough money to build a cheap crappy, temporary stand. Having half the games at Ballymore would surely be a good idea, probably should have been investigated a few years ago.

 

[liquor box]

I think it is time to suck up to the government and get them to bail out the team. If it was a league team they would be covered straight away.

I dont think a move to Ballymore will solve any problems. I think that they need to look at why their crowds are so low, it is not only performance, but price that is one of the problems.

Even if they are losing every week, if the prices were lower then people will go for the event on its own, look how well racing markets itself. THis is what Rugby might need to do, have more of a party atmosphere for younger people before the game and make a fortune off the drinks, not the tickets.

 

[Refabit]

Ballymore is history except for the odd game. No one wants to go to crappy facilities with no access and poor viewing.
Winning will bring back the crowds and finances will follow.

 

[rugbyfreak]

One step away from private ownership?

 

[chief]

It's costing a lot of money maintaining it. Hopefully the Government can finally realise that Rugby Union in Australia is only beneficial. There are British and Irish Lions tours, World Cups all to be held in Australia. I don't see why the government really doesn't show rugby some more funding. I mean come on, winning the 3rd biggest sporting event in the world is a big thing. I really do question Rudd's hate of Union, a disgrace that he is at Bledisloe's handing out the trophy.

 

[PhucNgo]

Approximately $1 million is written off each year in depreciation on their Ballymore home which the QRU has repeatedly said is "not sustainable".

A source today indicated that the ARU and QRU were on the verge of announcing a "financial arrangement" to ease the cash crisis.

I'm confused. How does this contribute to the cash crisis? :nta:

 

[Scotty]

Approximately $1 million is written off each year in depreciation on their Ballymore home which the QRU has repeatedly said is "not sustainable".

A source today indicated that the ARU and QRU were on the verge of announcing a "financial arrangement" to ease the cash crisis.

I'm confused. How does this contribute to the cash crisis? :nta:

Yeah, they always put that fact in, like it has anything to do with day to day funding of operations!

 

[rugbywhisperer]

maybe they are looking ahead and actually squirreling some money away for future expansion/development etc and that is reducingavailable funds for operating expenses.

 

[TOCC]

well it does and it doesnt, it reflects in the overall equity that the QRU holds, this has massive implications when it comes to a operating loss.

A declining value base means the banks are unlikely to accept operating losses anymore, the value of ballymore was once enough to provide a security for the QRU, but its value has declined such that they arent able to use it anymore or they are but its going to be more exspensive for them to secure funding.

 

[Scotty]

well it does and it doesnt, it reflects in the overall equity that the QRU holds, this has massive implications when it comes to a operating loss.

A declining value base means the banks are unlikely to accept operating losses anymore, the value of ballymore was once enough to provide a security for the QRU, but its value has declined such that they arent able to use it anymore or they are but its going to be more exspensive for them to secure funding.

Point I was about to make.

Anyway, the 1M figure has been around for a few years now - how come it is the same figure for 3 years running - it obviously isn't as depreciation can't work that way.

 

[Lindommer]

Approximately $1 million is written off each year in depreciation on their Ballymore home...

How can the QRU continue to write off $1mill a year? Surely Ballymore's been written off by now. Any bean-counters on board? They might like to advise us what the rules are for depreciating land and buildings.

 

[Ash]

If the ARU does bail out the QRU in some way, then they should do the same thing they did at NSWRU - install ARU administrators on the QRU board until they drag the QRU back to solvency.

And hopefully, the QRU wouldn't be as short sighted as the NSWRU and kick them off as the first act of the board once control is passed back. That was sickening, especially Kumar. But, I wouldn't hold my breath. Old blazer rugby administrators leave a lot to be desired in Australia.

 

[Scotty]

How can the QRU continue to write off $1mill a year? Surely Ballymore's been written off by now. Any bean-counters on board? They might like to advise us what the rules are for depreciating land and buildings.

I would have thought it was impossible to depreciate land. And on the building side you can surely only depreciate a % of its capital value each year, meaning that the depreciation figure should be continually getting smaller unless any capital works are done on it.

 

[Ash]

I would have thought it was impossible to depreciate land. And on the building side you can surely only depreciate a % of its capital value each year, meaning that the depreciation figure should be continually getting smaller unless any capital works are done on it.

Land can appreciate and depriacte. Ask the people in the US, UK, Dubai, etc. But in the QRU's case, I don't think they can depreciate the land, but regarding the buildings I wouldn't be surprised if they can pass into a liability with some creative accounting.